In planning anything, logic says that we should always have a (clear) vision, or at least a fairly good idea of what the plan’s projected outcome will be. If you are starting a business, or doing an addition/remodel of your home, you would have a blueprint created that would effectively demonstrate the end result and show you how to effectively get there. If you agree then let me ask you a question, if you were designing a personal financial plan wouldn’t it make good sense to approach its construction with the “end in mind”? Not merely an approach that focuses on the building of wealth, but one that also examines and incorporates the ultimate goal of why you have a long-term financial plan in the first place…to generate an income stream that your accumulated assets can ultimately provide for you, and how that part of the equation actually works. What I can tell you very strongly, and that I recommend you wrap your head around and clearly understand, is that the formula for wealth distribution from your accumulated assets is an entirely different calculation than the calculations used during the wealth accumulation phase of your life. This is H U G E!
A begin with the end in mind approach to any long-term savings & investment plan should:
- Allow you to create a blueprint of your present personal financial world (current assets and cash-flow).
- Clearly project the outcome (future income) from the path you are currently on.
- It should also allow for some fine tuning / tweaking of all possible assumptions being made – rate of return/inflation rate/safe withdrawal rate)
- Incorporate any/all available investment vehicles and financial tools.
- Compare alternate financial “strategies” with the end goal of how to be best positioned, both now and forever, to yield the highest possible income stream / lifestyle later.
While the above would seem to make a lot of sense, unfortunately this is not the common approach that exists in the typical financial planning space, as everyone is so focused on the accumulation side of the equation and isn’t 100% clear on what the type of life/ lifestyle you are on path to have. This type of planning says I am doing the best I can based on what I know, and as long as the pile is big enough I should be OK. Do you really want to be waking up anywhere near age 65, 67, 70 to then discover how you are going to turn your accumulated assets into income? This isn’t beginning with the end in mind.
You see the problem is that waiting reduces your ability from strategically incorporating some additional financial tools, ideally sooner than later, to allow for a significantly positive financial impact on the wealth distribution formula. Tools that could effectively yield from 15% to 50% greater income during your retirement years.
Want to find out how this can be accomplished? Then I invite you to time-travel with me into your future and I will show you the course you are headed, and how you can be best positioned NOW so you can have the best possible income stream/lifestyle later, and with more assurance of having it. I look forward to the journey together…